Augustinian friars from Spain belonging to the Province of the Most Holy Name of Jesus of the Philippines founded the University of San Agustin on July 15, 1904.

The university began as a preparatory school for boys during the American colonial period. It was granted government recognition on December 12, 1912.

During the Second World War (1941-45), the college was temporarily shuttered as the Philippines fought a guerilla war against the Japanese. The war led to the destruction of all the buildings, except for Urdaneta Hall, which at present houses the university theatre and the College of Pharmacy and Medical Technology. With almost the entire college in ruins, some friars advocated closing the school altogether while others pushed for its immediate rehabilitation.

The school was granted university status on March 1, 1953, a year before its 50th anniversary, making it the first university in Western Visayas.